The Emporia weekly news. [volume] (Emporia, Kan.) 1881-1889, 1887-07-14
THE PACIFIC INVEsTTGAr.ON.
The COzamIstee Pumps . Union Pa
eSGe AkfOrnavx

5HE PACIFIC INVESTIGATION.
The Committee Pumps = Union Pa
; cffic Attorney
KANSAS CITY, July S.-The Pacifi
Railway Investigating Committee to
day examined at great length Judge j
P. Usher, the attorney of the Kansas
Pacific and the man who drew up thu
mortgage consolidating the Kansa:
Pacific and the Union Pacific. TIL,
main features Of the examination re
lated to the consolidation and to Ger
} tain expenditures for so-caIIed legal ex
: penSes prior to the consolidation. Ii
, answer to inquiries by Commissioner
Anderson, Usher narrated the story OF
| the Kansas Pacific enterprise from its
inception in 1880. The first charter
he said, was in the PaWnee, Leaven.
worth and Western Company, a Kan
sas corporation, the original design
being to build the road from Leaven.
] worth to Lawrence. Subsequently the
) enterprise took a larger scope and be-
came competitor for the privilege of
building line to the Pacific Ocean.
The witness gave graphic description
of the competition for this right and of
personal interviews of his with Presi-
dent Lincoln as to the selection of the
initial point. The final determination
was that the Pacific road proper should
begin at the Tooth meridian, that line
being about 40 miles west of Omaha.
Various points on the Missouri River,
extending from Sioux City on the
north to Kansas City on the south
were rivals in Congress for the privi-
lege of exclusive control of the intended
trans-continental route. Each wished
to be the starting point. The result,
the witness said, was reflected in the
original Pacific railroad act of 1862,
which gave the Leavenworth, Pawnee
| & Western Company a right to con-
meet with the Union Pacific on the line
of the Tooth meridian. The desire to
obtain this privilege neceSsitated the
| personal attendance of the President of
that Company, Gen. John c. Stone,
and other promoters of the enterprise
before committees of Congress.
Commissioner Anderson interrogated
| the witness with regard to certificates
of stock of the Leavenworth, Pawnee
! & Western Company, which General
Stone had testified before this commits
sion had been distributed in large
quantities to persons supposed to have
influence with Members of Congress.
Judge Usher denied positively that the
certificate attributed to him on Gen er a
Stones memorandum had ever been, inl
u lie
lied the certificates as spurious and
without value, and declared that he
had not learned Of their existence until
after the passage of the act of July l,
1852. Shortly after that date he learned
of the memorandum made by General
Stone, but denied that he had any per-
sonal knowledge whatever of any at
tempt to influence the votes of the
Members of Congress.
Io6 Of
siderable length the progress made by
the Kansas Pacific Company and the
issues of its various bonds and mort
cages until its completion from Kansas
City to Denver in 1870. He also de-
scribed the financial embarrassment
that overlook the road until it passed
into the hands of the receivers in 1876,
and its bankrupt condition during the
following two years. In 1873, he con-
tinued, vigorous efforts were made by
the Kansas Pacific to acquire by
legislation the right of through freight
over the line of the Union Pacific by
compelling the latter to accept and
deliver through freight at Cheyenne.
In furtherance of this Objecr he (the
witnessl and other persons interested
in the Kansas Pacific were in Wash
ington in the winter OF 1877. There he
met Jay Gould. Gould suggested to
that the holders of Kansas Pacific
stock should sell their stock to him
tGould). The negotiation was short,
sharp and decisive. All the Kansas
Pacific people agreed to sell their stock
at 124 per cent, and bargain was con-
cluded in the spring of 1879.
The witness was examined at length
with reference to the terms of consoli-
dated mortgages which provided for
| returning all the outstanding Securi-
ties of the Union Pacific except its first
mortgage, the Government mortgage,
and its stock. The scheme of the
mortgage, he. said, contemplated a
scaling of all outstanding securities at
rates specified in the mortgage. The
| trustees were Jay Gould and Russell
Sage. A peculiar feature of the mort
gage was the existence of special
| provision by which the securities owned
by Jay Gould and Russell Sage were
exempted from the communication rates,
and were entitled to be retained at a
specified sum, the total amounting to
$500, 900 in bonds. The sum or amount
in bonds to which their securities would
have been entitled at the communication
| rates provided for other holders was
| only 50, 250, 900.
Commissioner Anderson examined
the witness closely as to what instruc-
| lions he had received that led to the
insertion of that provision, but on this
point Judge Usher was only able to
say that they had received no inStruc-
tions that he could recall except those
received by Jay Gould personally.
Governor Pattison examined the
witness with regard to a number of
items found in the book of the Kansas
Pacific Company showing payments for
legal expenses. The Governor having
called on the company to produce
vouchers for the respective items took
them up in detail. The principal
items were one of $4,000
paid to William E. Chandler for
services i'll 1874, in assisting to get the
pro rata bill passed by Congress-; an
item of 5000 for extraordinary eX-
penses incurred at Topeka by an at
tOrney named Denis on behalf of Kan
sas Pacific Company; an item of 81, 749
paid John b. Henderson, of st. Louis;
$745 paid Horace White; s., 900 paid r.
M. Shoemaker, and two items aggre-
eating "a 600, all for assisting in the
passage of bills.
AS to those items Judge Usher said
he had never had anything to do with
that sort OF thing" The Denis So, 0OC
item mad no doubt been expended in
entertaining members of the Legisla.
ture at Topeka. There were some
very hungry and thirsty men at Topeka
about that time, $50 of them
Governor Pattison asked whether
the witness regarded the bill of vii
liam Z. Chandler as for illegal ex.
penses?"
He replied that he did not consider il
. law business at all.
When asked what sort of business hi
considered 1t, he said he would call il
SOLICITING business 1t consisted Of
preparing bills and explaining to mem
bers of Congress the necessity for the
bills becoming law, and soliciting the
votes of members for bills. The bill Of
John E. Henderson, he said, was
for legal arguments delivered il
a land controversy. The bill of Hor
. ace White, Mr.. Usher was surprised tt
; see. 1t was for preparing and deliver
ing speech before a committee o.
/ Congress on the pro rate bill; but Mr.
Usher had always supposed until thil
. voucher was shown him that HoracI
! White had been a volunteer in TIT
service which he rendered. The Other